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|Archives - July 2009|
|Wednesday, June 24, 2009|
Lithia went public in 1996 and grew from five stores to more than 90 over one freewheeling decade. CEO Sid DeBoer had hoped to build the company into an $11 billion empire by 2011, but that was before his key suppliers, Chrysler and GM, fizzled into bankruptcy. Lithia struggled mightily in 2008, losing $252 million for the year.
But then a surprising thing happened in the first quarter of 2009: Lithia posted a profit. Its stock, which bottomed out at $2 per share in April, rebounded powerfully on news that Chrysler’s abrupt elimination of 789 underperforming stores would help rather than hurt Lithia. “We lost two stores, but we should be able to pick up nine additional franchises in five of our current locations,” says DeBoer.
Three Lithia stores are also at risk from the GM bankruptcy, but it could have been much worse. Lithia minimized its losses by deciding in the fourth quarter of 2007 to begin conserving cash and selling off unnecessary assets. The company sold 14 dealerships in 2008 and has lightened its debt load from $269 million to $45 million while slashing its workforce from about 6,000 to 4,300. “It was painful,” says DeBoer. “A lot of people lost their jobs and we lost some stores that we would like to have kept in good times.”
But it worked. According to DeBoer, sales in May exceeded Lithia’s projections. “All the stores we’ve sold or closed were losing money,” he says. “We will make more money without them.”
It won’t be a Sunday drive. Lithia still has 11 dealerships on the market as of press time, and gas prices are rising again. But DeBoer says he feels much better about Lithia’s position than he did a year ago, and he’s thankful he called for the radical shift in strategy sooner rather than later.
“Having lived in the car business since 1964,” he says, “I’ve learned that those who act the fastest get through these things in the best shape.”
Tuesday, January 21, 2014
Today the real estate cycle is on the move. For those who want cheap entertainment, there is no shortage of holes in the ground (with modern-day steam shovels) to peer into. So bring your lunch and watch the city grow.
Friday, January 24, 2014
BY TOM COX | OB BLOGGER
January needn’t be a time to make well intentioned promises to yourself that you soon break.
Tuesday, January 21, 2014
BY JON BELL
Developers chase the rental market and change the face of Portland neighborhoods.
Thursday, January 23, 2014
Chris Maples, President at Oregon Institute of Technology and Dave Rathbun, President of Mt. Bachelor ski resort share what they've been reading.
Thursday, January 16, 2014
BY JOE ROJAS-BURKE | OB BLOGGER
An economic study of emergency room utilization in Oregon set off a thundering media stampede earlier this month. I was struck by the cut-and-paste sameness of much of the reporting and how awfully little it had to say about the untreated wound that is causing all the pain: the hole in our healthcare system where a robust primary care infrastructure should be.
Friday, February 14, 2014
BY MIKE GREEN | OB BLOGGER
Oregon Business speaks with Patrick Quinton, executive director of the Portland Development Commission, about tech startups, equity and community impact.
Tuesday, February 25, 2014
BY LINDA BAKER
A blueberry bush is a blueberry bush — except when it’s a blueberry tree.
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